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Tax audit applicability

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Himanshu Agarwal

Proprietor

186 Points Posted on 24 March 2021

Dear All,
person is having turnover of 2.5 cr and 100% receipt is other than cash..
He is showing profit of less than 8%.
Do tax audit applicable for him for FY 2020-21

Replies (5)

Quick Summary

This discussion clarifies tax audit applicability for FY 2020-21. For individuals with a turnover exceeding £2 crore and entirely digital receipts, the standard 44AD scheme doesn't apply. While typically a profit of at least 6% is required for 44AD with digital receipts up to £2 crore, the rules differ for higher turnovers. The query centres on whether a profit below 8% necessitates a tax audit when turnover is between £2-5 crore and all receipts are digital.

Aayush Munje

63 Points Posted on 24 March 2021

Yes the Tax Audit is applicable for the person

Himanshu Agarwal

Proprietor

186 Points Posted on 24 March 2021

But if turnover is above 2 cr applicability of 44AD is not there,so person above 2cr to 5cr showing cash receipts less than 5% can even show profit less that 8% without the audit also

Kamal Verma

Financial advisor

592 Points Posted on 24 March 2021

If profit earned is equal to or greater than 6% and all the receipt are through bank or digitally up to turnover of Rs. 2 crore. You can file return under section 44AD. otherwise tax audit will be applicable if profit is less than 6%.

CA. Sourav Sarkar

Chartered Accountant

24588 Points Posted on 24 March 2021

As in your case presumptive taxation is not applicable as turnover exceeds threshold limit and receipt is 100% in online mode but turnover is less than 5 crores rupees.
So, Tax audit is not applicable